Just double-clicking Winword.exe exhibits the same behavior.
If I lower the HKCR priority of the layer to below the base (that is, 85.6) then the repair happens when you launch the Word short-cut. The changes are made in the writable section of the layer. The repair runs every time I launch Word.
If both versions of Office are in layers everything appears to work correctly.
We are seeing the same situation with either Microsoft Office 2003 or 2007 installed on the base and either version of Microsoft Office running on a layer.
We are not sure what is causing the issue but the Microsoft Forms GUID is the main suspect at this point.
A workaround to this issue is to virtualize both Office versions. This appears to resolve the conflict seen when either version of Office is in the base and in the layer.Also we have encountered that the Microsoft Forms 2.0 GUID can cause this issue. When installing Microsoft Office on the host system, perform a custom install that will not upgrade any previous versions and deselect anything that referred to Forms or Smart Forms in the common office sections. Did not find any references in specific products.
Also Microsoft does recommend removing and reinstalling .NET 1.1 and 2.0 clean in case there are issues with .NET.
Software Virtualization Solution 2.0, 2.1
Any version of Microsoft Office (2000, 2003, 2007) installed on the base and another version of Microsoft Office running on a layer (2000, 2003, 2007).